I set up the new internet & phone for my parents about a year ago and pay half their bill for them to lower their costs and they just send me the rest including what they use on calls if any. Part of the plan i have is that they get free evening and weekend calls to other BT landlines which is pretty standard, but go outside of that time frame and the cost is ridiculous. A few calls to some relatives in cornwall lasting about two hours all together landed me with an extra £35 to pay which i wasn't expecting either. Now given that there are so many free alternatives out there that we all frequently use, why is it that on of the oldest 'modern' ways of communicating with each other still as antiquated and often uncompetitive pricing. You would think that as more free alternative services become available to us to communicate (although yes you do pay for the internet to use such services which isn't the point) that service providers around the world don't drop their rates, in fact many are increasing their rates as is the case with my provider.
So why isn't this the case? If you can Skype call someone anywhere in the world for free for as long as you need to, why does it cost an arm and leg to do the same by telephone in the 21st century?
asked Oct 09 '12 at 09:52
The phone system is really heavily taxed with the number of users on and and their demand. It is out of date and has very high maintenance cost. Many companies are going to VoIP service to greatly reduce costs.
So why does the phone system not update to something newer? well that would cost way to much, and many people will need special phones or at least equipment on their house to make the call.
As you said there are many free, or at least low cost, alternatives but for the vast majority of the population does it replace picking up a phone mounted to a wall or sitting on a desk? I would say no.
Skype allows you to call for free from PC to PC but once you start to call to cellphones or land lines, then you get charged. But lets not forget you are paying for internet and thus you are paying for infrastructure behind it. You just are paying for it in the way of internet that you are using to make phone calls.
The other aspect is standard telephone companies are trying hard to keep relevant with a dieing infrastructure compared to cable.
answered Oct 09 '12 at 10:12
And let us not forget that as people drop land line phones the maintenance costs for the lines still remain so they must raise the costs on people to cover them
answered Oct 09 '12 at 22:04
with advancing technology in phone systems, they use mostly the tame equipment and infrastructure as wired and wireless Internet communications, so from the companies standpoint a phone call and a skype call cost them the same amount but it is just more profitable to charge insane prices for phone service because it is almost pure profit for them and since people are more or less used to paying so much for phone service, the price has stuck around even when it is no longer needed.
the established phone companies have also pushed for government regulation that significantly increases the cost of entry into this market so in order to start one you have to already be very rich
same thing with radio (a small radio station can be started for about $7000, but the cost of various processing fees when you beg the government for permission is in the range of $70,000 to 100,000, this forces people to would like to innovate and profit from it, go through already established businesses where they can take a cut of the revenue)
(look at presidential contributions from the various large companies and the current president voting habits when it comes to regulation)
answered Oct 10 '12 at 00:23